In a landmark move during its 56th meeting on Wednesday, September 3, the Goods and Services Tax (GST) Council approved a long-awaited overhaul of the GST rate structure. Most notably, it eliminated the 12 per cent and 28 per cent slabs, leading to rate reductions across a broad range of sectors—from healthcare and real estate to FMCG, education, and consumer durables.
Key beneficiaries include essential medicines, medical devices, insurance, cement, steel, and electronic appliances. Industry leaders across the board have welcomed the reforms, citing potential benefits for affordability, demand revival, and economic momentum.
Here’s how key stakeholders from different sectors have reacted to the GST reforms:
Healthcare: A Milestone for Affordable Treatment
Dr. Sujit Paul, Group CEO, Zota Healthcare Ltd.
“The reduction of GST rates on essential medicines and medical equipment is both historic and humane. With GST on 33 life-saving drugs dropping from 12 per cent to zero, and critical drugs for cancer and rare diseases reduced from 5 per cent to nil, millions of families will experience real financial relief. GST on all other medicines has been cut from 12 per cent to 5 per cent, while rates on surgical, dental, and diagnostic equipment are now just 5 per cent.
This reform advances access to affordable care and strengthens our mission to deliver high-quality generics at lower prices. It’s a future-focused move that ensures price is no longer a barrier to treatment.”
Dr. Mayank Somani, MD & CEO, Apollomedics Super Speciality Hospital
“GST reforms in healthcare will significantly benefit the middle and lower-middle classes. A zero GST rate on health insurance will increase adoption and reduce families’ financial vulnerability during medical emergencies. Similarly, reduced GST on medical devices and life-saving drugs will make treatment more accessible. We thank the government for prioritising healthcare.”
Real Estate: Building Homes, Building Hope
Khalid Masood, Managing Director, Shalimar Corp
“With GST on cement and steel cut from 28 pr cent to 18 per cent, housing costs will drop considerably, helping millions realise the dream of owning a home. This reform brings greater transparency and boosts trust in the sector, which is expected to see increased construction activity and job creation. A truly transformative step for real estate and the economy.”
Consumer Durables & Electronics: A Festive Boost
Anurag Sharma, Managing Director & CEO, AKAI India
“The GST reduction from 28 per cent to 18 per cent on electronics such as televisions and air-conditioners is a progressive step that will directly benefit millions of households. With price drops of ₹3,000 to ₹5,000 on major appliances, consumer sentiment—especially in Tier II and III cities—will be uplifted during the festive season.
This move will also improve logistics efficiency and reduce operating costs for manufacturers.”
FMCG & MSMEs: More Disposable Income, Higher Demand
Yawar Ali Shah, Co-founder & CEO, AMA Herbal; Convenor, CII MSME Panel
“This GST rate cut is well-timed, especially as exporters grapple with international tariff pressures. It will also increase disposable income for consumers, potentially boosting investment and demand in other sectors. From textiles to groceries and fertilisers, the changes are pro-growth and supportive of MSMEs and domestic production.”
Adding to the optimism, Vivek Singh, CEO, Home Credit India, highlighted the broader impact on household finances and consumer behavior:
“The recent GST rationalization, which simplifies tax slabs and corrects the inverted duty structure, is a highly progressive and timely reform that will significantly boost consumption and support our fast-growing economy. This move will have a meaningful impact on middle-class households, where a large portion of income is spent on daily necessities. By lowering the GST on everyday items like packaged foods, personal care products, and kitchenware to the 5 per cent bracket, families will see a direct reduction in their monthly expenses. We anticipate this will help lower inflation by over a percentage point.
At the consumer level, we expect to see a dual effect. Lower prices will likely lead to increased spending on fast-moving consumer goods (FMCG), durables, and electronics. Additionally, families may choose to use some of their savings to build stronger financial buffers. The timing of this reform, just before the festive season, is particularly significant. It will boost consumer confidence and fuel demand for aspirational purchases, from home appliances to two-wheelers—categories where our EMI financing plays a key role.
Education: Democratising Access and Opportunity
Praneet Mungali, Trustee, Sanskriti Group of Schools
“In today’s AI-driven world, education is the bedrock of national competitiveness. The government’s GST rationalisation—making essentials like personal care products, insurance, and other daily-use items more affordable—will ease household budgets, especially in lower-income segments.
This helps extend educational opportunities to a wider base and strengthens our human capital for the future.”
Tourism & Hospitality: A Mixed Bag
Ravi Gosain, President, IATO
“The move to reduce GST on hotel rooms priced up to ₹7,500 from 12 per cent to 5 per cent without ITC is a welcome effort to make tourism more affordable. However, removing the input tax credit creates a cascading tax burden for tour operators bundling services. While customers benefit from lower prices, the industry needs a credit-friendly framework to remain competitive internationally. We urge the government to revisit this provision.”
Banking & Financial Services: Enabling Economic Transmission
The reforms are also expected to spur growth in the banking and financial services sector, with rising consumer demand likely to drive up credit uptake across retail and enterprise segments.
Ashok Chandra, MD & CEO, PNB, underscored the readiness of the banking sector to meet this surge:
“The GST 2.0 reform, which will come into effect on September 22, 2025, on 396 items, represents a significant enhancement to India’s indirect tax framework. This reform is anticipated to stimulate domestic demand for goods & services, contribute to the reduction of core inflation, and foster economic growth through increased disposable income and improved compliances.
The banking sector stands to benefit substantially from this reform, with expected increases in demand for credit and financial services, particularly in the retail, agriculture, MSME and renewable energy sectors.
